House panel okays $30.45 billion budget with health reforms, local aid cut

Cities and towns would receive the unilateral authority to raise health care co-payments and deductibles for their workers, and Gov. Deval Patrick’s signature life science tax credit program would be capped under a $30.45 billion annual spending plan approved by the House budget committee on Wednesday and marked for debate later this month.

The spending plan, the House’s first stab at closing a $1.9 billion gap between spending priorities and available revenues, would boost education aid to cities and towns to $3.99 billion, a 3.1 percent increase, and reduce unrestricted aid to cities and towns by $65 million, a 7 percent cut, leaving the total at $833 million. Those changes mirror the local aid levels proposed by Gov. Deval Patrick in January.

Senate President Therese Murray told the News Service Wednesday morning that the Senate anticipates endorsing those levels of local aid during a Thursday debate on a non-binding resolution.

The House Ways and Means budget also supports the governor’s plan to increase special education funding by $80 million to $213 million. The bill also draws about $200 million from the state’s rainy day fund, a similar draw to the governor’s proposal.

“Although Massachusetts has fared better than other states during the recession, this year’s budget gap forced us to make difficult choices to ensure that we met our constitutional requirement to balance the budget,” House budget chief Brian Dempsey wrote in a letter to lawmakers. “As the economy slowly recovers, the committee has strived to address the commonwealth’s fiscal challenges while balancing our commitments to education, job retention and assisting those in need.”

The Ways and Means proposal, an answer to the $30.5 billion budget that Patrick offered in January, scrapped several of the governor’s plans to raise additional revenue, such as through expanding the state’s bottle recycling program to include non-carbonated beverages.

In his letter, Dempsey said that the budget would include “no new taxes or gimmicks that would place any additional burden on taxpayers.”

Rep. Viriato deMacedo (R-Plymouth), the ranking Republican on Ways and Means, opted against voting for or against the budget at an 11:45 a.m. committee meeting because he was just seeing the massive bill for the first time. Many committee members flipped through the bill with great interest during the few minutes before Dempsey gaveled the meeting to order and the panel approved the bill on a voice vote.

“Generally, the numbers are a little bit less than the governor’s numbers,” said deMacedo, adding that Republicans have questions about whether the Patrick administration can shave hundreds of millions of dollars off projected state government health care spending.

While rebounding, tax collections for fiscal 2012, deMacedo said, are still lower than collections in fiscal 2009. “It’s a tight budget,” he said. “The revenues aren’t there.”

The committee budget would allow cities and towns to change co-pays and deductibles and other health benefits for their workers without unions at the table. The proposal adopts a union proposal that would share a portion of the savings with municipal employees in the first year of the plan, but permits public employees to share 10 percent of the total savings, far less than the 50 percent they had sought.

The House budget would also wring an estimated $53 million in savings from the state’s public defender network, a system that relies on private attorneys to perform the bulk of the work. To achieve savings, the proposal would reduce the maximum number of billable hours for private attorneys to 1,500 a year, would bolster checks to ensure that those accessing public defenders are truly indigent, and would rely on more full-time public defenders to assume some of the caseload now borne by private attorneys.

The proposal would adopt a long-held Republican proposal to require that companies who fail to pay their workers on time are only penalized if the violation was intentional, and it would waive certain penalties on businesses for audits that last longer than 18 months.

The budget’s largest expenditure, as expected, is a $10.3 billion appropriation for Medicaid – health care coverage for low-income residents – which is expected to see a 4.6 percent increase in enrollment to 1.3 million members. Like Patrick, the budget relies heavily on savings from major health care programs, like Medicaid; Commonwealth Care and the Group Insurance Commission. The Ways and Means Committee matched the governor’s proposal to spend $822 million on Commonwealth Care to cover an estimated 160,000 enrollees who earn less than about $31,000 – three times the federal poverty level.

The House Ways and Means plan also officially scraps the governor’s proposal to merge the state probation and parole agencies under the Executive Branch. The plan, which Patrick relied on for $15 million in savings and included as part of his public safety agenda, drew opposition from top judiciary figures, and lawmakers were instantly cool to it.

The Probation Department, the subject of a variety of investigations following a patronage scandal, is funded at $116 million, a $3 million cut from the previous fiscal year, under the Ways and Means plan.

Other budget highlights include:

- $313 million for transitional assistance grant payments to families with dependent children
- $36 million for a rental voucher program
- $226.7 million for the State Police, as well as funding for a new class of cadets
- $751 million for residential and day services for adults with developmental disabilities, part of a $1.3 billion overall budget for the Department of Developmental Services.

The budget plan includes more than 100 policy changes, many of which were not immediately decipherable, based on information provided. One would bar recipients of cash assistance from spending funds on alcohol or tobacco products, an issue that made headlines last year.